National Consumer Disputes Redressal
Amit Gupta & Anr. vs M/S. Vatika Limited on 30 October, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 425 OF 2018 1. AMIT GUPTA & ANR. ...........Complainant(s) Versus 1. M/S. VATIKA LIMITED Through its Authorized Signatory Having Its Registered Office at: 4th Floor, Vatika Triangle, MG Road Sushant Lok PH-I, Block A Gurgaon Haryana. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Complainant : Mr. Sushil Kaushik, Advocate
Ms. Himanshi Singh, Advocate For the Opp.Party : Mr. Pankaj Vivek, Advocate
Mr. Anurag, Advocate
Mr. Harshit Chopra, Advocate
Dated : 30 Oct 2019 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)
The complainants first booked a residential flat with the OP in a project namely 'Vatika India Next' in Gurgaon, vide application dated 02.11.2009. The possession of the said flat was to be delivered to them by mid-2013. Since the construction of the originally allotted unit in Vatika India Next, which was to be located in Sector 83 E of the project was not started, they were shifted by the OP to Sector 82-S of the said project. The construction of the residential flat even in Sector 82-S did not progress well. The complainants submitted an expression of interest/ application dated 20.12.2013 to the OP for allotment of a residential apartment of 1850 sq. ft. in Sector 82-A at the basic price of Rs.6220 per sq. ft. and made a payment of Rs.6,00,000/- along with the expression of interest. Vide allotment letter dated 30.10.2014, the OP allotted residential flat No.2401 in Tower A of the above referred project to the complainants, on the terms and conditions mentioned therein.
2. The OP sent the blank of Builder Buyer Agreement to the complainants on 16.4.2015. Some of the terms and conditions contained in the said agreement were not acceptable to the complainants. They therefore sent an email dated 26.8.2015 responding to the draft agreement, which was sent to them along with a letter dated 16.7.2015. Some of the objections raised by the complainants were as under:
"1. It appears from Section A that full land has not yet been acquired for the said housing colony. Also License No.22 of 2011 as mentioned in section B is expired in March, 2015 as checked form DTCP website on August 21,2015. You are in breach of the promise of my making the application.
2....
3. Clause F mention about several exceptions including 'specification and location' of the flat. This is not communicated to me before (at the time of book and thereafter) and this is the first time it is mentioned. So please provide complete details and justification on this part. So that I can decide if I want to accept it or not. In case you cannot provide it then please remove this clause from the agreement.
4....
5. In clase 2 it is the first time Vatika has mentioned about earnest money with its definition. So far the definition of EM was not communicated to me either by the vatika or involved broker. The definition of EM as proposed in BBA is not acceptable, it cannot be more than 10% of booking amount paid with Express of Interest.
6. Clause 2 also mention about non-refundable amount including brokerage paid. Please quantify all such amounts in the BBA. Non-refundable amount cannot be forfeit by developer for reasons which are beyond Allottee's control (e.g. Allottee not agreeing to changes as mentioned in clause 9, 12 etc.)
7. At multiple places it is mentioned that developer can return amount with 12% interest for various reasons whereas allottee is liable to pay 18% for delays in payment. This need to be same penalty on both parties at 18%.
8. Clause 7 does not mention of interest payment to allottee. In any event of cancellation developer must pay 18% interest for the amount paid irrespective of reason for cancellation (clause 16, 17, 19).
9. .....
10. Clause 8 is not acceptable with following concerns:
a) This is the first time escalation clause is defined by vatika.
b) Timelines are fully controlled by developer therefore Allottee cannot be made liable for escalation which is not controlled by Allottee. The price mentioned in BBA must cover any escalation whatsoever.
11. Clause 9, I would like to get more details on how super built up area is calculated (please include % calculations with justification) and also provide reference to Government regulation supporting this clause.
12. ...
13. Clause 12, Any changes to specifications, floor plans etc. must be communicated and agreed with allottee as an amendment to this BBA.
14. Clause 13, possession must be offered only after Occupational Certificate is awarded by government authorities for the said housing colony.
15. Clause 20, No additional service charge must be applicable for conveyance deed. This is standard services provided by developer as part of agreement.
16. Clause 21(i), part related to removal form Act not clear. How can something from be removed from law?
17. Clause 18, the amounts mentioned should be final and not subject to revision."
3. On September 2, 2015, the OP responded to the email sent by the complainants. The reply to the Email of the complainants shows that on the date the said reply was sent, the license, which DTCP had granted for the development of the colony stood expired though the OP had applied for its renewal. The OP maintained the Clause, which provided for payment of additional service charges for conveyance deed as also the clauses with respect to the payment of the interest by the alloottee at a rate higher than the rate at which it was to be paid by the builder. The OP maintained that the said clauses could not be changed by the complainants. It was also clearly conveyed to the complainants that no amendment in the clauses contained in the agreement was possible. The OP also insisted on retaining the clause with respect to the payment of escalation charges. No response was given by the OP with respect to the calculation of the super built up area and payment of additional tax.
4. The complainants were not satisfied with the response received from the OP and therefore did not make further payment after April, 2015. Since the issues raised by the complainants were not addressed, they, vide email dated 06.12.2017 sought refund of the amount which they had paid to the OP along with interest. That having not been done, they are before this Commission, seeking refund of the entire amount of Rs.37,05,892/- paid by them to the OP, along with interest on that amount.
5. The complaint has been resisted by the OP which has taken a preliminary objection that the complainants are not consumers but are dwellers in Real Estate who had made multiple bookings with a view to sell the units at a profit. On merits, the booking and the allotments made to the complainants have not been disputed nor has the OP disputed the payment received from the complainants. It is pointed out in the written version that as against the price of more than Rs.1.3 crores, the complainants have paid only about Rs.37,00,000/- to the OP.
6. Coming to the preliminary objection, it would be seen from the chronology of events that initially the complainants had booked a residential flat in Sector 83E of the project Vatika India Next. The said booking was made vide application dated 02.11.2009. The construction of the flat so booked by the complainants did not take off and therefore, they booked a residential flat in the project namely 'Tranquil Heights' in December, 2013 when the timeline for delivery of the possession in Sector 83E had already expired, the said timeline having expired in Mid-2013. The complainants therefore, cannot be said to be speculators merely on account of their having booked a residential flat in the project namely 'Tranquil Heights'. The construction of the flat in Sector 83-E having not even taken off, it was only natural for them to look for another residential flat. Hoping that the project namely 'Tranquil Heights' will take off, they made a booking in that project. Therefore, it cannot be said that the booking in the project namely 'Tranquil Heights' was made for a speculative purpose. In fact, had the booking been made for a speculative purpose, the complainants would not have raised the objections to the terms and conditions of the allotment at the initial stage itself. The very fact that they had meticulously examined the terms and conditions of the agreement sent to them by the OP had had raised objections to several terms and conditions contained therein is a clear indicator that they were bonafide consumers and that's why they were seeking to safeguard their interest by signing only such terms which they thought would be fair and reasonable to both the parties, instead of signing on the dotted lines. Therefore, I find no merit in the preliminary objection taken by the OP.
7. The next question which arises for consideration is as to whether the complainants are entitled to refund of the amount paid by them to the OP or the OP is entitled to forfeit the Earnest Money as per the terms and conditions of the proposed buyers' agreement, which they had sent to the complainants.
8. On a perusal of the terms and conditions to which the complainants had adopted, I find that that the objections raised by them cannot be said to be devoid of any substance. The terms and conditions conveyed to the complainants were wholly one-sided and the parties are not evenly placed even in the matter of payment of interest in a case of default by one of the parties to the agreement. Even the basis of the calculation of super built up area was not provided to them nor were they given any clarity on additional tax. Such wholly one-sided agreements were termed as unfair and were not approved by the Hon'ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan (2019) 5 SCC 725, which to the extent it is relevant reads as under:
"6.4. A perusal of the Apartment Buyer's Agreement dated 08.05.2012 reveals stark incongruities between the remedies available to both the parties.
For instance, Clause 6.4 (ii) of the Agreement entitles the Appellant - Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent - Flat Purchaser.
Clause 6.4 (iii) of the Agreement entitles the Appellant - Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 days.
On the other hand, as per Clause 11.5 of the Agreement, if the Appellant - Builder fails to deliver possession of the apartment within the stipulated period, the Respondent - Flat Purchaser has to wait for a period of 12 months after the end of the grace period, before serving a Termination Notice of 90 days on the Appellant - Builder, and even thereafter, the Appellant - Builder gets 90 days to refund only the actual installment paid by the Respondent - Flat Purchaser, after adjusting the taxes paid, interest and penalty on delayed payments. In case of any delay thereafter, the Appellant - Builder is liable to pay Interest @ 9% p.a. only.
6.5. Another instance is Clause 23.4 of the Agreement which entitles the Appellant - Builder to serve a Termination Notice upon the Respondent - Flat Purchaser for breach of any contractual obligation. If the Respondent - Flat Purchaser fails to rectify the default within 30 days of the Termination Notice, then the Agreement automatically stands cancelled, and the Appellant - Builder has the right to forfeit the entire amount of Earnest Money towards liquidated damages.
On the other hand, as Clause 11.5 (v) of the Agreement, if the Respondent - Flat Purchaser fails to exercise his right of termination within the time limit provided in Clause 11.5, then he shall not be entitled to terminate the Agreement thereafter, and shall be bound by the provisions of the Agreement.
6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines 'unfair trade practices' in the following words :
"'unfair trade practice' means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice ...", and includes any of the practices enumerated therein. The provision is illustrative, and not exhaustive.
In Central Inland Water Transport Corporation Limited and Ors. v. Brojo Nath Ganguly and Ors.,4 this Court held that :
"89. ... Our judges are bound by their oath to 'uphold the Constitution and the laws'. The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and equal protection of the laws. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. ...
... These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances."
(emphasis supplied) 6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.
The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder."
Moreover, in this case the license issued by DTCP having expired, the complainants could not be expected to continue making further payments, without restoration of the said license.
9. It is an admitted position that despite the complainants having not made any further payment to the OP after April, 2015, the allotment was never cancelled on account of non-payment of the further installments. During the course of hearing, I asked the learned counsel for the OP as to what is the present status of the project in which allotment, subject matter of this complaint was made to the complainants. The learned counsel submits that he has no updation on the current status of the project. The learned counsel for the complainants however submits that the license which DTCP had issued to the OP is lying expired since March, 2019 and the project is far from complete. This is also submitted by the learned counsel for the complainants that in January, 2018, the construction was complete at best to the extent of 40% as would be evident from the demand raised by the OP vide letter dated 11.1.2018 when the said demand is examined in the light of the payment already made by the complainants by that time and the payment schedule agreed between the parties. Be that as it may, since the terms and conditions contained in the format of the flat buyers' agreement, were not incorporated in the application / express of interest submitted by the complainants nor were the same contained in the letter of allotment issued to them, the OP in my opinion, could not have insisted upon retaining the said terms and conditions and if those terms and conditions were not acceptable to the complainants, the OP ought to have refunded the entire amount paid to the by the OP. Since the OP had also utilized the money received from the complainants they already ought to have paid suitable interest on that amount.
10. The learned counsel for the complainant also relied upon the decision of this Commission dated 23.10.2017 in Amit Kansal Vs. M/s. Vatika Limited CC No. 1244 of 2015, which pertain to the allotment made in this very project namely 'Tranquil Heights'. In Amit Kansal (supra), the terms of the builder buyer agreement sent to the complainants for signatures were not acceptable to him and therefore, he sought some changes in the agreement to which the builder did not agree. He stopped making further payment and approached this Commission by way of a consumer complaint, seeking refund of the amount paid by him to the builder with interest etc. The complaint was resisted by the OP inter-alia on the ground that the complainant was a speculator who wanted to make quick gains and he was duty-bound to sign the standard builder buyer agreement sent to him by the OP for signatures. Rejecting the contentions advanced by the OP and allowing the consumer complaint, this Commission directed refund of the entire amount which the said complainant had paid to the OP, along with interest on that amount @ 9% per annum.
11. Considering all the facts and circumstances of the case, the complaint is disposed of with the following directions:
(i) The OP shall refund the entire principal amount of Rs.37,05,892/- to the complainants along with compensation in the form of simple interest on that amount @ 9% per annum with effect from the date of each payment, till the date of refund;
(ii) The OP shall also pay a sum of Rs.25,000/- as the cost of litigation to the complainants.
(iii) The payment in terms of this order shall be made within a period of three months from today.
......................J V.K. JAIN PRESIDING MEMBER